Russian Gas Returns to Romania amid Regulatory Changes

New regulations slated to come into force this year could increase Russia’s energy influence in Romania, a country which for years was considered one of the least dependent countries on Russian gas imports, the Business Review writes. 

After 2013, Romania’s gas imports from Russia rapidly declined, reaching a decades-low of 163,000 tep in 2015. During this period, it was mainly considered that the country’s own resources are covering most of its domestic demand. But imports rose again in 2016. In 2017, imports of natural gas from Russia declined by 19 percent to 962,000 tep, from 1.19 million tep in 2016, but the trend changed direction again last year, the website reports. 

In 2018, the indicator soared by 26.8 percent to 1.2 million tons of oil equivalent (toe), the highest level since 2012, in sharp contrast with the trend seen during the previous years. Romania’s sole source of imported gas is Russian giant Gazprom, through two intermediary companies. The reversal in 2018 may indicate a rising reliance on Russian gas – and put at risk one of Romania’s biggest assets, Business Review writes.

In 2016, Romania ranked 26th among the 28 European Union member states in terms of energy dependency, with energy imports covering only 22.3 percent of national consumption. The energy dependency of the EU stood at 53.6 percent in 2016.

Running out of revenue sources, the government imposed special taxes of 2 percent of turnover on energy firms at the beginning of this year and capped the retail and corporate gas price at RON 68/Mwh ($16.19/Mwh). These measures were introduced through the controversial emergency ordinance 114/2018, which players say caused major upheaval in the energy market.

“When the government representative presented us with the draft ordinance, my first reaction was: my God, you’re selling us to the Russians! Because this was like a door wide open to Russian gas,” a source from the energy market told BR.

In effect, the two major gas producers in Romania – Romgaz and OMV Petrom – are being forced to sell gas at capped prices and pay extra taxes, while there is no regulation governing imported gas – meaning that such a measure hits local producers and favors gas imports from Russia.

And the effect was soon evident: in January, Romania increased its reliance on Russian gas, as imports from Gazprom jumped, and at much higher prices, official data show.

According to the Romanian energy regulator (ANRE), gas imports from Russia rose by 55 percent in the first month of the year compared to January 2018, to 4.2 million MWh, while the average price shot up by 37 percent to RON 124.1 per MWh. Romania’s reliance on Russian gas imports climbed this year as 23 percent of total gas consumption was covered by Gazprom, compared to 18.6 percent in January 2018.